England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CANTERBURY COUNTY COURT
(HIS HONOUR JUDGE NASH)

		Royal Courts of Justice Strand London, WC2
		15th April 2003

LORD JUSTICE POTTER:

INTRODUCTION

1. In this unusual case the claimant, who is the former town clerk of the defendant town council ("the council"), on 29th April 2002 obtained judgment in her favour for £197,401.51 upon her claim for damages for personal injuries alleged to have been caused by the negligence or breach of contract of the council, such injuries taking the form of a "nervous breakdown" or, more accurately, severe psychiatric symptoms of depression giving rise to a prolonged depressive episode rendering her incapable of work. By the time of trial, she had not worked for five years and the judge regarded it as unlikely that she would work again. In addition to his award of general damages in the sum of £12,000, he made an award of special damage and future earnings loss based on his finding that, but for the council's breach of duty, the claimant would have worked on as town clerk to the age of 62. On that basis, the figure awarded for past loss of earnings was £70,985, and for future earnings loss £87,449.
2. There was an underlying difficulty in the case. As the judge found, the claimant was "superficially strong, undoubtedly decisive, methodical, meticulous, to the point of being a perfectionist", but, at the same time, she was, in the words of the medical experts, "psychiatrically vulnerable". She had for many years received specialist treatment by way of drugs and psychiatric counselling for recurrent depression arising from factors in her personal life. One of the principal issues before the judge on the question of liability was whether, and, if so, to what extent, the council was aware of these problems and ought to have appreciated that the stresses in her work might aggravate them. Equally, so far as quantum was concerned, there was an issue as to whether, and to what extent, it could be assumed that the claimant would have remained in employment but for the events which immediately triggered her nervous breakdown.
3. The claimant applied for leave to appeal the decision of the judge both as to liability and quantum. On 30th July 2002 the single Lord Justice refused permission to appeal in respect of liability, but gave leave to appeal on quantum in respect of grounds which asserted that the judge failed to take account of the claimant's underlying psychiatric problems in assessing the amount of general and special damage; that he was wrong to find that the claimant would have continued in work to the age of 62, this being against the weight of the medical evidence; and that he was wrong to find that the claimant had no residual earning capacity, this also being against the weight of the evidence.
4. The single Lord Justice also directed that any renewed application for permission to appeal on liability should be made to the court hearing the quantum appeal. We have heard the application and the appeal together.

The Factual Background

5. I take the background from the judgment below, though I am constrained to say that it was generally delivered in a somewhat discursive and rhetorical manner which does not render readily accessible the detail of the essential events.
6. The judge summarised the medical history of the claimant as:

"An established history of recurrent depression from childhood, continuing into adult life ... She has been from time to time over the years receiving specialist treatment from drugs and from counselling. These difficulties of hers continued throughout the 1970s, the 1980s and the 1990s. She was from time to time seeing a community psychiatric nurse, albeit for counselling, over a period of many years through to the end of 1996 and then again, I find, in early 1997 ... she remained at risk for further episodes of depression or anxiety, certainly from 1997 onwards. She was an individual at increased risk of an adverse psychiatric reaction to stress or, more importantly perhaps in this case, to particular acts or parts of conduct to which she might be subject ... I was addressed at some length by counsel as to whether or not she was suffering from any psychiatric identifiable condition or just plain vulnerable. I have come to the conclusion that she was suffering from the former and it was not just a simple case of vulnerability in a possibly over-sensitive personality, as I touch upon later."

"Was the claimant suffering from a psychiatric condition which rendered her more vulnerable to stress than usual or that normally experienced by an employee with a reasonably heavy workload? The answer to that question must inevitably be yes."

7. Having so found, the judge acknowledged that to succeed under either limb the claimant must establish that, at the time of the acts of which the claimant made complaint, her employers knew of her psychiatric vulnerability and that it was more than simply the stress upon an employee who found difficulty in adapting to changes in the circumstances of her work.
8. In fact, the claimant's case was not principally based upon the assertion that her breakdown was caused by the nature of her employment, or even by special or unusual tasks she was required to carry out. It was her case that the triggering events for her nervous breakdown occurred at a time when she was off sick with bronchitis, and she unexpectedly received a letter of warning dated 13th November 1997 in respect of her conduct, as a result of which meetings and correspondence followed which so exacerbated her initial shock and distress that she was rendered incapable of work through depression. The judge approached the case on the basis that:

"For this case to succeed the claimant must prove that she was at all material times a [psychiatrically] vulnerable person; secondly, her employers were aware of this vulnerability; thirdly, it was foreseeable that unless they acted with reasonable care the claimant was likely to suffer harm, in other words a breakdown; and they, fourthly, materially caused her breakdown either by doing something no reasonable employer knowing her vulnerability should or would have done, or by failing to do something any reasonable employer should and would have done."

9. This was plainly the judge's encapsulation of the legal principles expounded by Hale LJ in Hatton v Sutherland [2002] 2 AER 1 as applicable to the claim of a primary victim in tort where the claimant is at risk of foreseeable psychiatric harm from the actions of the defendant and/or in contract where the harm is the reasonably foreseeable product of specific breaches of a contractual duty of care towards a victim whose identity is known in advance, such as an employee: see in particular paragraphs 21 and 23 of Hale LJ's judgment. There has been no issue between the parties on this appeal that, with the insertion in square brackets of the word "psychiatrically" in the passage I have quoted, and, in the light of the judge's acknowledgment that it meant "foreseeably likely to suffer a nervous breakdown", the judge's statement of the law was appropriate to the issues in the case. There is also no issue that the claim as pleaded, developed and decided by the judge was not a case where the triggering factor of the claimant's depressive illness/breakdown was undue stress by reason of the work she was required to do, but the writing of the warning letter on 13th November in circumstances in which (a) it should not have been sent without a prior approach to the claimant to hear her side of things and (b) it was accepted by the council in evidence that it would not have been sent, had they been aware of the claimant's psychiatric problems.
10. Reverting to the judge's four criteria of success, it was never an issue, as indeed the judge held, that the claimant satisfied the first criterion that she was in fact psychiatrically vulnerable, being the victim of long-standing recurrent depression (see paragraph 6 above). So far as the second criterion is concerned, he held that awareness of her vulnerability had also been proved. Suffice it to say at this stage that his finding in that respect forms the principal ground of appeal and I shall return to it in detail below. His finding also affects the third criterion because the joint experts were in agreement that, while it was arguable that the letter of 13th November might have been upsetting to an "ordinary, robust individual" it was "very unlikely to precipitate depression in a non-vulnerable person". As for the fourth criterion, in the light of admissions by council witnesses that, had the council been aware of the claimant's psychiatric problems, the letter would not have been sent, nothing in this appeal has turned on that issue.
11. In setting out the facts of the case, the judge started with a brief review of the claimant's working history from 1991 when she became deputy town clerk under the then town clerk, Mr Cox, with whom she worked well as a team. In that capacity he said that she was, upon the unchallenged evidence, "a committed and balanced worker with an unquestionable devotion to the town and with an exceptional knowledge of the events of the town and political awareness". He then described the position as from 1st August 1995, when the claimant was promoted to town clerk. Her former position as deputy was taken by a Mrs Headley, a very contrasting personality with whom the claimant did not get on so well. Nonetheless, the judge found that "the arrangement between these two unlikely bedfellows worked reasonably satisfactorily until November 1997". So far as the claimant's workload was concerned, the judge described the workload of her office as increasing significantly in the years 1995 to 1997. Whereas the claimant described it as exceptional, the judge found that it was "within the capabilities of any reasonably competent employee".
12. The judge then moved to a meeting which took place between the claimant and the mayor on 22nd August 1997. At this meeting the council made clear it was unhappy with the claimant's ability to prioritise her workload as between an important annual festival called "Broadstairs in Bloom" and a council Footpaths Initiative ("the Parish Paths Partnership"). The claimant made clear that she thought she was being overworked and she was suffering from stress caused by her work. The judge found that, at the end of that meeting, the council was aware of the claimant's stress and that she saw it as being caused by her workload, in which respect the mayor and the councillors involved treated her with sympathy, expressing the view that "the council wanted none of its employees overworked". The minutes of the meeting also contained references to the claimant's previous time off work with illness. Finally, it was clear that the council were aware of difficulties which the claimant and Mrs Headley had in working together.
13. Having considered the matter as at that stage, the judge expressed himself satisfied that the council then had knowledge of the claimant's background and psychiatric problems (again, I shall turn to the basis for that finding below) and thus of her vulnerability to stress at work. However, he said that as it was not feasible to give the claimant her old job back, and because her workload was not impossibly heavy, he did not find that the stress caused by her work involved any breach of duty on the part of the council as her employer at that stage. I pause only to say that is not perhaps surprising, because it was not the claimant's pleaded case that any breach of duty by the council occurred prior to the events of November to which I now turn. The position in November was as follows.
14. Shortly before 7th November the claimant went off sick with bronchitis. It was not suggested that it was because of stress. On 6th or 7th November, when she was still at home, she received a request from Mrs Headley to come to the council offices to sign the accounts which Mrs Headley had spent time in preparing over the previous weeks. Although the claimant was still off sick and seeing the doctor, because it was an emergency, she went in on the afternoon of 7th November in order to sign the accounts and intending to deliver her sick note. When she was handed the accounts, because they contained a dossier of information for which her signature would make her responsible, and which she had not previously seen, she said that she would need some time to consider the information. She expressed herself brusquely and made clear that she would not have time to consider the information until she returned to work at the end of the following week. Mrs Headley and a Mrs McCormack who had worked hard in preparing the accounts in the previous week took remarks made by the claimant as a criticism of the work which they had done. Mrs McCormack was in or close to tears and Mrs Headley was also upset. Later that afternoon, Mrs Cradduck, who was a former mayor and a personal friend of the claimant, and later Mrs Hooker, the current mayor whom the claimant also knew well, came into the office and found Mrs McCormack and Mrs Headley very upset, Mrs Headley expressing disapproval of the claimant's conduct. Other councillors became involved. Mrs Cradduck and Mrs Hooker regarded it as a crisis and called a meeting that evening, chaired by Mr Emes, with three other councillors present.
15. The judge found the minutes of that meeting inaccurate and unhelpful. He found that, whether as a result of bad-tempered and inaccurate presentation by Mrs Headley, or for some other reason, the councillors were given the impression that the claimant, unwell, had come voluntarily (ie unasked) into the office, disturbing and upsetting the conscientious working of loyal staff when she had no right to do so. The judge found that at that meeting and a subsequent staff sub-committee meeting held on 10th November 1997 there was a sense of outrage (which the judge found to be quite unjustified) at the claimant's behaviour and a resolve to do something about it. A view was formed that the claimant's visit to the offices on 7th November was, as the judge put it, "unscheduled, ill-mannered, disruptive and dismissible".
16. The council sought the advice of a Mr Williamson, an official responsible for advising local councils, who gave apparently correct advice to the effect that, if the job was too much for the claimant, the council did not have to create a position for the claimant merely to accommodate her shortcomings or inability to cope. At the sub-committee meeting there was discussion about the claimant's health and an expressed wish not to add more pressure upon her. The judge expressed himself satisfied that Mrs Cradduck and Mrs Hooker would have informed the meeting of information they had as to the claimant's past medical history. I shall return to the state of knowledge of Mrs Cradduck and Mrs Hooker in that regard hereafter, as it gives rise to the principal ground of appeal.
17. At a further sub-committee meeting on 11th November it was decided, pursuant to earlier advice given by Mr Williamson, that a "verbal warning" would be given to the claimant.
18. Of course, the claimant was off ill, and therefore that warning was, in fact, effected in the form of a letter typed on 13th November 1997 and signed and delivered to the claimant's house by Mrs Hooker, which stated:

"On the afternoon of Friday 7th November 1997, you visited the office, and I have received reports that your attitude on that occasion caused distress to the Assistant Town Clerk and the Supply Clerk who has been helping out at a particularly busy time.

"I am obliged to inform you that whilst on sick leave you should not be giving orders to, or disrupting the working methods of those staff in work."

19. The letter went on to say that the claimant's absence had brought to light areas of her responsibilities which had not been addressed, particularly the actioning of the project regarding the Parish Paths Partnership discussed at the meeting of 22nd August 1997. It stated that, on the claimant's return, her Terms of Reference would be reviewed "with the Welfare of the Staff in mind". It finished:

"Because of your absence on sick leave this letter serves as a Verbal Warning, which is the first stage of the Disciplinary Procedure. I realise that this is hurtful and difficult for you, and I am willing to meet with you if you require, to talk things through."

20. The judge, perhaps not surprisingly, expressed himself in vigorous terms on the timing and content of the letter, bearing in mind (as he said) that the claimant regarded Mrs Hooker as both a friend and confidante. However, it may well be that in that last respect he was confusing Mrs Hooker with Mrs Cradduck. Mrs Hooker made no attempt whatever, whether herself or by others, to obtain the claimant's version of events before administering that formal disciplinary warning to someone who was the town clerk and had previously received no intimation of complaint.
21. The claimant was deeply upset, distressed and depressed by the letter, exacerbated by the fact that it came from the mayor, Mrs Hooker, who was a personal friend. The claimant responded by letter on 14th November 1997. It set out her side of the story and was conciliatory in nature, explaining the reason why she had been on the premises on 7th November. The judge said he was confident that if the claimant had ever been asked for her explanation and, had that letter been received before 13th November, there could have been no question of the letter of verbal warning being issued.
22. On 20th November 1997 the claimant, accompanied by Mr Cox, the former respected town clerk, met Mrs Hooker and Mrs Cradduck in a meeting at which Mr Cox expressed his grave concern at the way the council had behaved. It was acknowledged by Mrs Hooker for the council that the reference to the Parish Paths Partnership should not have been in the letter. She also, as the judge found, indicated clearly that, following the next council meeting, the verbal warning would be withdrawn. Accordingly, the claimant left the meeting properly expecting that the letter would be withdrawn, and that the matter of the Parish Paths Partnership would be dealt with by meetings of a non-disciplinary kind, as had been the position in August previously.
23. In fact, no response or other communication was sent to the claimant until a letter dated 3rd December 1997, by which date there had been no further consultation with her and no opportunity for her to make formal representations on the letter of 7th November if, contrary to the previous assurance, it was not to be withdrawn.
24. The letter of 3rd December 1997 notified the claimant in bald terms that the council had decided to "ratify" the warning letter.
25. The judge held that it was clear, and indeed it was not disputed, that shortly thereafter the claimant suffered a breakdown which was immediately precipitated by the events I have recounted. The judge expressed his conclusion on liability as follows:

"By almost everything the council did from 7 November to 3 December, which is the date of the affirmation letter, the defendant either caused or materially contributed to the claimant's breakdown and I so hold. That left her unfit for work. Given the knowledge that it had had of her vulnerability and her work history, it was plainly foreseeable, in my judgment, that unless it investigated any complaint, which it was fully entitled to do of course, in a just and fair way, Mrs Croft, as a professional woman, would be quite likely to be tipped over the edge and that all-important element of trust and confidence which has to exist between employer and employee would be broken, probably without any prospect of repair.

"Could the defendant have avoided this breach of confidence and trust? Yes, of course it could. How? By the very easy and simple process of saying: 'Well, Mrs Headley, you made these accusations against Mrs Croft, our Town Clerk. She is the Town Clerk but, whether she is or is not, we must obviously speak to her first'. That is a practical illustration of what the council could so easily have done and which it singularly failed to do, failing to observe what I regard in this court as a basic rule of justice and fairness, and in particular in this case its shortcoming is exacerbated by the fact that the claimant, the victim of all this, was a public figure holding public office. By failing to give her an opportunity to be heard before embarking arbitrarily, as I so find, and erroneously upon a disciplinary process which was without foundation, it would foreseeably have led to disastrous consequences in terms of Mrs Croft's, the employee's, emotional vulnerability, and it did.

"The breach, as I have already said, might have been repairable between 7th November and 3rd December, and the damage minimised, if not removed. The defendants chose not to take that course. They must now pay damages for their conduct. The trigger for the breakdown of which the claimant now complains is plainly the letter of 13th November. The claimant's position was exacerbated by the letter of 3rd December. Decisions made by the council as reflected in the minutes probably do not add anything in connection with the claimant's claim but there is, in my judgment, the plainest breach of trust and confidence as between employer and employee."

26. It will be noted that the judge framed his findings by reference to one of the ways in which the case had been pleaded in the Particulars of Claim, ie as an alternative to the pleaded contractual duty of care owed by the council to the claimant as its employee. However, nothing has turned on that point in this appeal, the matter being approached by the judge overall as set out at paragraphs 8 and 9 above.

Liability

27. The judge's findings that the council were aware of the claimant's psychiatric vulnerability, in the light of which knowledge it was foreseeable that the letter of 13th November, unless withdrawn, might cause a nervous breakdown, were based upon his finding that, despite the unchallenged evidence that the claimant was "a committed and balanced worker" and despite her being "superficially strong, undoubtedly decisive [and] methodical", Mrs Cradduck and Mrs Hooker were in possession of special knowledge that she was psychiatrically vulnerable. He found that they:

"were in possession of information which was the town council's, that Mrs Croft had psychiatric problems, and I find too, they were aware that from time to time she was seeing the community psychiatric nurse probably as late as early 1997, Mrs Hooker's information coming of course primarily from Mrs Cradduck. It is that relationship, that friendship, which proved the fountain for that information ...

"That is not to say that Mrs Croft regarded Mrs Cradduck as her confidante, but the relationship was very much more than employer/employee. I readily accept that Mrs Croft was a private person. Of course she did not disclose details, as I have already made clear, of her early psychiatric history, but Mrs Cradduck was aware of psychiatric problems in outline and, as I hold, probably aware of her visits to the psychiatric nurse".

28. He held that such knowledge was in the possession of the council at the time the letter was written and which he inferred must have been made clear to the sub-committee considering the position on 10th November.
29. The judge based the inference upon the fact that, at that meeting, the minutes showed that the council referred to the claimant's health and a wish not to add more pressure upon her. He did not treat that as simply a reference to the fact that the claimant was off with bronchitis, but dealt with it in this way:

"I wonder why that was, I ask. The entire sub-committee and therefore the entire Council were therefore alive to the claimant's health problems, even if they had not been on an informal basis because of the relationship the claimant had had over the years with Mrs Hooker and more particularly Mrs Cradduck. I am satisfied that both Mrs Cradduck and Mrs Hooker wasted no time at all in disclosing the information that they had gathered about the claimant's medical history at this meeting, if they had not done earlier, and I have already held that they had".

30. Ms Rodway QC, for the defendant, has submitted that these findings of the judge and his chain of reasoning were totally unjustified upon the case as presented to him. His finding depended upon analysis (as Mr Pulman QC has accepted for the claimant) upon an assertion made by the claimant for the first time in her oral evidence that she "thought and believed" that Mrs Cradduck (at some time unspecified) knew that she had been in receipt of "counselling".
31. Before turning to the evidence of the claimant, however, it is important and instructive to turn briefly to the way in which the case was presented, and to the state of the medical evidence which was essentially agreed, save as to the prognosis of a likely return to work by the claimant in the period after trial.
32. In the Particulars of Claim, whereas it was asserted that the council had acted in a manner which had caused severe damage to the psychological health of the claimant, the Particulars of Negligence and/or breach of contract relied simply on (i) the warning letter of 13th November; (ii) the meeting of 20th November between the claimant and Mr Cox and Mrs Hooker and Mrs Cradduck; (iii) the breaking of the assurance to withdraw the letter and the lack of further contact or response before the letter of ratification of 3rd December; (iv) the content of that letter itself; (v) the subsequent failure to give effect to the contractual grievance procedure; (vi) the imposing of an excessive workload on the claimant. It was alleged that heads (i) to (vi) taken together constituted breaches of the implied terms of the claimant's contract of employment and/or a negligent failure to take reasonable care for the health and safety of the claimant "with particular reference to her psychological health". Finally, it was pleaded that it was a foreseeable consequence of those matters that the claimant would suffer injury to her psychological health. There was a reference in the claim to the report of Dr Rehling, a consultant psychiatrist, as justifying the assertion that the council's actions had caused the claimant to suffer, and continue to suffer, depression. However, there was no plea or suggestion anywhere in the claim that the council or any councillor had any knowledge of the claimant's depression or psychiatric problems.
33. The psychiatrist instructed by the council was Professor Fahy. In their psychiatric reports placed before the judge, both Dr Rehling and Professor Fahy gave an outline of the family history and personal background of the claimant. Dr Rehling's diagnosis, as to which Professor Fahy did not disagree, was that the claimant suffered from recurrent depressive disorder with evidence of a relatively high degree of sensitivity to interpersonal strains and slights; and particularly to perceived experiences of rejection. She had a special vulnerability to depressive disorder which had been evidenced since late adolescence and she was "exquisitely sensitive to experiences of displeasure, hostility or rejection from or by others. Such experiences are highly likely to pitch her into a depressive episode". He stated that early in 1997 she had been well enough to be discharged from her community psychiatric nurse's caseload after many years, which suggested that she was better than for some considerable time. However, the letter and the events described precipitated a recurrence of her depressive and anxiety symptoms in the form of a breakdown of a severity which prevented her from working. Professor Fahy's diagnosis was not significantly dissimilar. However, his report, importantly, contained the following passage, about which he was not challenged, as follows:

"Mrs Croft said that she is capable and she is good in a crisis. She described herself as methodical, even painstaking in her approach to work. She said that during a crisis she is better at prioritising than when dealing with day-to-day work. She said that her employers would have seen her as a robust person, as that was the way that she presented herself to others. To the best of her knowledge her employers did not know about her previous psychiatric history, although she had a month off work due to 'exhaustion' in April 1996." (emphasis added)

34. Elsewhere, the following passage appeared:

"Mrs Croft's history of depression would identify her as an individual at increased risk of an adverse psychiatric reaction to stress. However, from the information available to me, it is not clear that her employers have any indication of Mrs Croft's vulnerability, and I can find no reason why she should have been viewed by her employers as anything other than a robust person." (emphasis added)

35. In the skeleton argument of the claimant before the judge there was again no suggestion that the council were aware of the claimant's psychiatric problems. The primary case was put on the basis of breach of trust and confidence by reason of the events in November, the alternative case being that the workload of the claimant was excessive and caused and/or contributed to her breakdown in mental health.
36. In opening the case, Mr Johnson for the claimant said that the claimant had never made any factual allegation and did not now seek to do so, that she had said anything to the council on the lines of "I have a history of psychiatric illness" or "I have had breakdowns in my psychiatric health in the past". He said it was simply her case that the people in the council knew her very well through the closeness of the work place and personal relationships outside, and that they had "knowledge of her personality", which the court could take into account when deciding whether the council should have appreciated the consequences of its actions.
37. Further, the witness statement of the claimant was tailored to the claim as pleaded. She emphasised her workload. The only references to her health were in that connection. She stated that she had developed "a stress-related rash and exhaustion", being off work between 3rd April and 6th May 1996, and that at her meeting with Mrs Hooker on 22nd August 1997 she had complained of her workload.
38. It was only in oral elaboration of her statement in chief that there was any allusion to her psychiatric ill health. Having stated in response to a question about her relationship with members of the council, that she knew Mrs Cradduck and Mrs Hooker "pretty well", and that Mrs Cradduck, who lived near her, had been involved with her on out-of-council committees together, she was asked to describe her relationship with them. She stated:

"I would have said that Mrs Cradduck and I were close friends. Confidences had been exchanged. I had been invited to and indeed attended her daughter's wedding. She had visited my home. I had visited her home. You know, all the usual things that friends do."

39. There then followed one of two passages upon which, in the event, the whole case appears to have turned:

"Q You have mentioned confidences being exchanged. Now, we know from the medical records you have had in the past episodes of psychiatric ill health. Now, do you allege that those were amongst the confidences you exchanged with Mrs Cradduck?

"A I truly can't recall but I think it highly likely that she knew that I was seeing a counsellor. I can't recall a particular incident when I said: 'Of course you know I am', but I think she was aware.

"Q More generally, would you say that she would have some knowledge and understanding of your personality, given the relationship you had with her?

"A Yes, she had certainly seen me extremely distressed outside the office.

"Q Moving on then to Counsellor [sic] Mrs Hooker, really the same sort of questions. How well did you know her and what was your relationship with her?

"A It's not as close as it was with Mrs Cradduck. I had a great deal of -- I find it very hard to say that I had. I always had a great deal of respect for Mrs Hooker. A very honest women. Her son and my son were -- they knew each other. You know, we talked about our children and her family problems. I mean, again, confidences had been exchanged. I wasn't so closely involved with Mrs Hooker as I had been with Mrs Cradduck."

40. The claimant was cross-examined at some length on her case as to the stress she had suffered from work. In its course she conceded that counselling which for some years she had been receiving from a community psychiatric nurse was largely to do with problems she had been experiencing after the breakdown of her relationship with her husband, and ongoing problems including those in connection with her four adolescent children. She said she had not seen the counsellor about problems related to her work. She said that she had consulted her General Practitioner who had given her a certificate when she was off work in 1996 referring to "exhaustion and stress", but it did not say anything about her work. There then followed the second of the critical passages of the claimant's evidence, when she was cross-examined by reference to the case for the council to this effect:

"Q And you accept that so far what they say in their written evidence indicates that they had no knowledge of you having a psychiatric history or problems of a psychological or psychiatric nature?

"A There was no need for them to know. I dare say Mrs Cradduck would put it that -- we used to have a saying in the office when a new Mayor came in, they used to say: 'But I don't do things like that', and we would say: 'Ah, but the Mayor does. You may not', and Pat would probably differentiate that -- Pat knew that I was seeing a counsellor, but Counsellor [sic] Mrs Cradduck didn't. But Pat knew -- I am 99% certain that Pat knew I was seeing a counsellor.

"Q I do not want to cross-examine you on witness statements but you have read what Mrs Cradduck says, and she says she had no knowledge that that was going on. You disagree with that, do you?

"A Yes, I do.

"Q If Mrs Cradduck had known that you were seeing a counsellor, from what I have just been through, she would naturally associate that with you seeing a counsellor for family problems, would she not, if you were telling her why you were seeing the counsellor?

"A I couldn't speak for how she would naturally associate anything with anything.

"Q Did you tell her why you were seeing the counsellor?

"A I don't know that I did, because there were certain areas we didn't -- you know, are accepted as being private.

"Q So given that the most on your evidence, she would have known is that you might be seeing a counsellor, and that was some private matter, that would not give her any more information, would it?

"A No, but, nevertheless she did know."

It seems clear that these words "she did know" refer to the point that the claimant had been seeing a counsellor.

41. A little later, when cross-examining on the reluctance the claimant had displayed in a letter after she had stopped work to permit direct contact with her doctor, counsel asked:

"Mrs Croft, is that the sentiment expressed in that letter of not wishing your employers to know about your past medical history ... a sentiment that you held to throughout your employment, is it not?"

42. The claimant answered:

"Well, yes, other than how it affected my work and it hadn't."

43. Since it was no part of the pleaded case or suggested by any of the medical reports or disclosed documents that anyone in the council was aware of the claimant's psychiatric problems or history, the witness statements of the council witnesses made no reference to the question of their state of knowledge in that respect.
44. The evidence of Mrs Hooker, the mayor and author of the letter of 13th November, was reflected in the following exchange in elaboration of her statement:

"Q Finally, can I ask you, Mrs Hooker, when you wrote the letter to Mrs Croft, what did you think her reaction might be to that?

"A I estimated that she would be very upset. I would be very upset, getting a letter like that, but I had hoped that we could talk it over and sort it out. That might have been naive of me, but that is what I had hoped, but I had not acted out of the blue, I had acted after the council had taken advice.

"Q Did you at any stage think that Mrs Croft's reaction would be the reaction that you and I know she had?

"A No.

"Q If that had been your thoughts, what would you have done about sending the letter?

"A I do not know. I think the letter might -- you know, we just cannot see ahead. I think the letter would probably have gone anyway because the council so decided.

"Q Did you know anything specific yourself about Mrs Croft's psychiatric history?

"A No.

"Q Had she ever made clear to you that she was a psychiatrically vulnerable person?

"A No."

45. In cross-examination Mrs Hooker acknowledged that she had known that in 1996 the claimant was off work. She had not seen her medical certificate, but linked it with the fact that the claimant was overworking, it being generally known that she would stay in the office on many evenings until late at night. In answer to the question of whether there was general concern that her working hours might cause her to be unwell, Mrs Hooker replied:

"Amongst some councillors there certainly was, that she was working very ... staying in the office very late into the night and there was some concern."

46. She was then cross-examined further on the question of the claimant's workload and its possibly stressful effects.
47. When cross-examined as to the highly adverse effect on the claimant of the 13th November letter, Mrs Hooker was asked whether, irrespective of what she might have thought the effect might be on the claimant, she in any event felt obliged to send the letter of 13th November because the committee had so decided. She observed:

"I do not think that that was a very fair question because I was not aware of Mrs Croft's medical history and there was no way that I could know."

48. In response to a further question along those lines, she said:

"That is fair, but I think had the council in general known of Mrs Croft's medical history then perhaps they would have decided otherwise, I do not know."

49. Pressed yet further, she said:

"I was asked the question, if we had known the psychological effect on Mrs Croft, would we have sent the letter, and I am trying to say there is no way we could have known: we were not aware of her past medical history."

Mr Johnson did not thereafter return to the question of the state of knowledge of Mrs Hooker or the council generally.

50. Mrs Cradduck's evidence in chief in relation to her state of knowledge was contained in the following exchange:

"Q Can I first of all ask you, please, about your knowledge of the claimant? Did you get to know the claimant very well over the years and what do you say about your relationship with her both on a professional and a friendship level?

"A Initially when I was first elected as a councillor, I just knew her as the Mayor's secretary, but over the course of time I did become -- outside any council business ... we did become friends, quite good friends, really, but always tried to keep the two things apart.

"Q Did you know anything about her private life, and in particular about her personal health issues?

"A No, I did not. I mean, I knew there were certain -- Janice was a very private person really, she did not really discuss a lot of her personal matters, certainly not to me anyway. I knew there had been problems in the family, but I never really knew the details."

51. In cross-examination she acknowledged that as a result of a relationship built up when the claimant was the mayor's secretary some years before and in social contacts outside, she had a friendship with the claimant which went well beyond the confines of work. When it was put to her that it was a "fairly close confiding relationship" in which the two of them would talk about personal problems, she answered:

"On a general basis, yes, but, as I have already said, Janice, Mrs Croft, did not always confide on private things."

52. She confirmed that she had no idea that the claimant had any history of mental illness of any description. However, and this is something to which Mr Pulman has attached great significance on this appeal, the following exchange occurred between her and Mr Johnson in cross-examination:

"Q ... We are 6 years on, of course, because the council took nearly 2 years to give a response to this complaint but that is perhaps by the by. Janice gave evidence on Monday that she had mentioned to you that she was seeing a counsellor. You apparently cannot confirm or deny that.

"A ... No I cannot. I am sorry."

53. However, in a later answer Mrs Cradduck made clear that she certainly did not now recall that the claimant was seeing a counsellor, nor did she recall it at the time when the letter was sent. Asked:

"Would you have approved or agreed to sending the letter of 13 November if you had known the claimant's psychiatric history and that she was psychiatrically vulnerable?"

She answered:

"No, I think if that had been my knowledge it would have thrown a whole different light on things."

54. Mr Emes, the councillor who chaired the meeting on 7th November, and who was present at the meetings on 10th and 11th November when the sending of the letter was proposed and seconded, stated that he was quite unaware of any psychiatric problems or psychiatric vulnerability on the part of the claimant, and stated that, if he had been, he would not have agreed to the letter of 13th November being sent. He was attacked in cross-examination on the procedure followed and the decision to send the letter, but he was asked no questions whatever to challenge his, or his colleagues', lack of awareness at the time that the claimant was suffering from psychiatric problems or was psychiatrically vulnerable.
55. Mr Bayford, a councillor who was not present at meetings before the sending of the letter, but was party to what followed, was also asked in examination by Ms Rodway whether or not he had any knowledge of the claimant's psychiatric history, to which he replied, "Absolutely not". That answer was neither challenged nor explored in cross-examination.
56. The only witness who stated that she was aware that the claimant had seen a counsellor was Mrs Headley, who gave evidence about the workload of the claimant and the incident in the office on 7th November. In cross-examination Mr Johnson put to her that the claimant had mentioned to her the fact that she was seeing a counsellor called Andy. Mrs Headley replied:

"I do understand that she did see a counsellor, but I had no idea what that was in connection with."

57. She could not recall whether that was towards the end of their time working together. She was asked whether that was something which ever came up in conversation between Mrs Headley and the councillors when they were talking about the office. Mrs Headley replied that it did not. She explained that:

"I was aware that she had lunchtime meetings from time to time and she told me one day where it was. I considered that her private business."

58. Asked if she could remember if any councillors were ever there when the claimant went off for lunchtime meetings, she said she did not think so. The office was actually locked and closed for lunch in those days, and the claimant's meetings had been during the lunch hour.
59. It is at this stage perhaps important to note that the judge stated that (save in one respect concerning the reason for the non-attendance of Mr Bayford at a committee meeting):

"All the witnesses from whom I have heard were endeavouring to do their best to be accurate and truthful ... but it should be remembered that each was having to recall events that occurred some 4½ years ago and on some of the topics which were discussed in evidence more than that, namely some 5 or 6 years ago."

60. In dealing with the question of the council's state of knowledge in the face of the denial of all council witnesses that they were aware of the claimant's psychiatric problems, the judge's stepping stone to a finding that the council had sufficient knowledge to have foreseen that the sending of the letter of 13th November and its subsequent confirmation might cause the claimant to have a nervous breakdown, was a finding (1) that Mrs Cradduck by reason of her friendship with the claimant was aware that she had been seeing a counsellor; (2) an inference or finding that Mrs Cradduck would so have informed the mayor, Mrs Hooker; (3) a further inference or finding that Mrs Cradduck and Mrs Hooker would have informed the sub-committee meeting held on 10th November of the information they had as to the claimant's past medical history.
61. So far as Mrs Cradduck's acquisition of knowledge was concerned, the judge dealt with it in this way. He said:

"I was left in no doubt at all that Mrs Croft was telling the truth when she said that Mrs Cradduck knew, she thought and believed, of her psychiatric problems. That was Mrs Croft's state of mind. She did not say 'I am certain because I told her'. The way she put it was that she was 99% certain and that says much for Mrs Croft. She gave no specific occasion on which her problems were discussed. It would have been so easy for her in support of her case to quote chapter and verse. I ask myself, cynical as I am, why she should did not choose to do that. The answer is because she was telling the truth and she was accurate in what she said."

62. He then went on to say:

"Mrs Cradduck did not say with any emphasis at all that she was never told or was never aware of the claimant's psychiatric condition or her emotional problems ... I am certain - in other words it goes beyond the question of probabilities - that Mrs Cradduck knew and in all probability I suspect Mrs Hooker knew, and it matters not because the personal knowledge of both those witnesses who were leading councillors on the council is the knowledge of the council.

"Of course Mrs Cradduck was not told precise details but she was, I am satisfied, given a general picture. In other words, she was aware of the claimant's psychiatric vulnerability."

63. He then went on to find that Mrs Cradduck and Mrs Hooker were in possession of information that she had psychiatric problems as quoted at paragraph 27 above.
64. The judge then tied in the knowledge which he attributed to Mrs Cradduck and Mrs Hooker with the meeting of 10th November at which the minutes showed that there had been discussion about the claimant's health and the pressures of her job upon her. He said:

"There was also discussion about the claimant's health and a wish not to add more pressure upon her. I wonder why that was, I ask. The entire sub-committee and therefore the entire Council were therefore alive to the claimant's health problems, even if they had not been on an informal basis because of the relationship the claimant had had over the years with Mrs Hooker and more particularly Mrs Cradduck. I am satisfied that both Mrs Cradduck and Mrs Hooker wasted no time at all in disclosing the information that they gathered about the claimant's medical history at this meeting, if they has not done earlier, and I have already held that they had."

65. Thus it was that he found the requisite knowledge and/or foresight on the part of the council at the time the letter was sent.
66. Ms Rodway has submitted for the council that what the judge did in giving judgment was, by a combination of imprecision and unjustifiable inference, to construct a case that the council were aware of the claimant's "psychiatric problems" when no such evidence was given and no such inference justified.
67. She points out that, not only had the case not been pleaded or advanced on that basis, but not a single witness said so. The entire edifice of the judgment was constructed upon the passages of the claimant's evidence already quoted at paragraphs 39 and 40 above, in which she stated, not that she had ever informed Mrs Cradduck of her psychiatric difficulties, but simply that she believed Mrs Cradduck was aware that she had been seeing "a counsellor", which later hardened to being "99% certain" that she did. However, not only did the claimant not elaborate or suggest that she had told Mrs Cradduck what her problems were, she was, from her own mouth in evidence and from other sources, someone who regarded her health and psychiatric state as her own business.
68. Thus, points out Ms Rodway, the passage where the judge addressed the issue and stated that the claimant was to be believed when she stated that she believed Mrs Cradduck knew of her psychiatric problems, involved a vital and inaccurate gloss upon her evidence. She had never so stated. All she had said was that Mrs Cradduck knew she had been seeing a counsellor. Again, as Ms Rodway submits, that is a vital distinction because simple knowledge that someone has been attending a counsellor falls well short of knowledge either that she is a depressive, hyper-sensitive to rejection (as was her case) or otherwise so psychiatrically vulnerable as to be likely to have a breakdown on receipt of an unjustified reprimand. This was particularly so in the case of one who, as she herself maintained and the judge found, presented at work as robust, methodical and efficient, and indeed (as she informed one of the psychiatrists) effectively regarded her work as a therapy for coping with the problems in her personal life, and further made clear that she was a private person not given to discussing her psychiatric problems. Nor, when the judge went on to say that although Mrs Cradduck was not told precise details, she was nevertheless given a "general picture", was there any evidence from the claimant or anyone else that that was so.
69. Ms Rodway goes on to submit, correctly in my view, that there was no evidence whatever upon which the judge could hold that Mrs Hooker was aware of the claimant's psychological problems as any matter of direct assertion by, or knowledge or communication derived from, the claimant herself. While he observed that Mrs Cradduck was Mrs Hooker's "primary" source of such information, there was certainly no other source suggested from which it could have come. The most that was ever put to Mrs Hooker was that she was aware that in 1996 the claimant had been off work with exhaustion and stress.
70. Finally Ms Rodway submits, again rightly in my view, that the information which the judge inferred or held would have been passed on to the meeting of 10th November could only have been as informative or significant as that which Mrs Cradduck had available or was able to pass on to Mrs Hooker. In this respect there was again no evidence that discussion or reference to the claimant's health was other than in the context of her absence with bronchitis or the earlier period off work with stress in August 1996. Furthermore, the judge's holding that what would have been passed on was, by implication, information as to the claimant's psychiatric problems, was an inference made in the fact of unchallenged evidence from Mr Emes, who had been present at that meeting, that he had no knowledge of the claimant's psychological history or problems and that had he had such knowledge, it would have thrown a different light on things.
71. Finally, there was no suggestion that the claimant had been showing contemporary signs of stress as opposed to an attack of bronchitis, because it was not in dispute at trial that the claimant had stopped seeing her counsellor in early 1997. Thus, submits Ms Rodway, the judge's leap from the claimant's assertion of her belief that Mrs Cradduck knew she had been seeing a counsellor, to a finding of knowledge on the part of the council that she had "psychiatric problems" and/or that the state of her mental health was such that an unjustified reprimand might trigger a nervous breakdown, was wholly unjustified.
72. I am bound to say I agree. It is apparent to me from my reading of his very full judgment that the judge was highly critical of the conduct of the council in the context of proper employment practice and the unfairness of the treatment it had administered to the claimant by not giving her an opportunity for an explanation, which, on their own admission, would have avoided the sending of the letter of warning.
73. However, that could not, and cannot, be a good reason for a finding as to the state of knowledge of the council as to her psychiatric vulnerability which, on the claimant's own evidence, was not made out. That left the council in the position of employers who were entitled to expect ordinary robustness in the claimant in an employment context, including disciplinary matters, in which she had certainly never been involved before. The evidence of the psychiatrist was clear that, in a person of ordinary robustness, which the claimant herself acknowledged was the image she presented to the council, a nervous breakdown would not, medically at least, be a foreseeable result of a reprimand as to her conduct; on the evidence that was the state of play from the council's point of view. In my view, the assertion of the claimant, even if correct, that Mrs Cradduck in a personal capacity was aware that she had had counselling was plainly insufficient to import knowledge on the council's part sufficient to demonstrate the likelihood of feelings of rejection and distress so strong as to trigger a nervous breakdown on receipt of the letter. Such a breakdown was not the reasonably foreseeable product of the conduct concerned, and therefore the council are entitled to succeed in the appeal.
74. I have not so far mentioned, let alone paid tribute to, the submissions of Mr Pulman, who has appeared for the claimant on this appeal, but who did not appear below. He, not unnaturally, urged upon us the undesirability, indeed the impropriety, of this court interfering with findings of fact by a judge at first instance who has heard all the witnesses and is able to judge the position. I recognise such a submission to be generally true. However, in my view analysis of the evidence in this case simply does not justify the finding of the judge on the crucial issue of knowledge. As I hope I have shown, the findings did not truly reflect the evidence, but involved an "improvement" of the state of the evidence which cannot be supported.
75. For those reasons, I would allow the application for permission to appeal on liability, and would allow the appeal. That being so, the issues as to quantum do not arise.
76. LORD JUSTICE TUCKEY: I agree. I have great sympathy for the claimant. The council's letter of 13th November 1997 and some of their subsequent conduct were unfair and hurtful, but that did not give the claimant a good claim of the kind made on her behalf unless she could show that the council were aware that she was a psychiatrically vulnerable person and that it was foreseeable that their letter and subsequent conduct might cause her to have a nervous breakdown. I think the judge's sympathy for the claimant and his outrage at what had happened led him to make findings on these two issues in favour of the claimant which were not open to him on the evidence for the reasons given by Potter LJ. This case illustrates the need for judges to guard against allowing sympathy and outrage to lead them astray.
77. MR JUSTICE HART: I agree with both judgments.